Wednesday, July 22, 2015

12 Things an Executor Should Do

The executor/executrix is the person charged with acting in the place of someone who died.  It is this person's job to make sure the decedent's bills are paid and that his/her financial affairs are wrapped up, and once creditors have been paid, it is the executor or executrix's job to see that the assets are distributed according to the decedent's will.  I don't know about other states, but in Louisiana, if a person dies without a will, the person who does that job is called an administrator/administratrix but for the sake of simplicity, I will use the term "executor/trix" throughout this article.  If you are appointed executor/trix here are some steps to follow:

Discuss the job pre-need:

Hopefully you will not be surprised you were given this job.  Hopefully the person who so appointed you asked your permission before doing so.  Ask this person to prepare a list of assets and accounts for you.  If not given to you, you should know where in the house to find it.  My dad kept his on a computer and in a fireproof box.  This list should include:
  • Bank Accounts:  At least the names of the bank(s); preferably account numbers as well;
  • Investment Accounts:  Account numbers, holders, websites, passwords.  Everything the executor/trix needs to find all the money
  • List of Real Estate Holdings:  If there is rental property, a copy of all leases, or at the least, the amount of rent due, and from whom; or if a mortgage is held, the name of the debtor, amount due and date due; 
  • List of all regular bills:  This is particularly important if they are paid automatically electronically.  It allows the executor to quickly shut off unneeded things (like NetFlix) while making sure the power bill is paid.
  • List of known debts:  Creditors have first rights to an estate.  Mortgages should be on this list as well as any other long-term debt.
  • Insurance Agent:  It is going to take time to wrap things up and the decedent's homeowner's insurance can be kept in effect during that time.  If there is life insurance, the executor needs to know about it so it can be claimed.  
  • Funeral/Burial Choices:  Especially if there may be disagreement among the heirs about the type, location or price of the funeral, having in writing what someone wants can reduce contention
  • Digital Information:  Having access to email and/or facebook accounts makes it easy to notify those important to the decedent about his/her death.  However the decedent needs to realize that giving out those passwords may give out secrets s/he would rather keep.  However, people should give serious consideration to giving the executor/trix access to photo accounts such as Google Photos, Flikr, or Amazon.
  • Business Information: If the person owns a business, with employees, those employees will need to be paid.  If the business is a sole-proprietorship (not a corporation or LLC), the business will die with the owner, even if the name and everything else is sold or passed on to heirs.  You need to know where to access any payroll records and tax records, as well as any information needed to keep the business running (if possible) until plans can be made for its future: 
  • Location of last year's tax return or name of tax preparer.  As executor/trix you will be responsible for filing the decedent's final tax return.  Having the prior return helps.
  • If the will contains any surprises, an explanation:  I think most children expect to share equally in their parents' estate with their siblings.  If one sibling for some reason is getting substantially more or substantially less than others, a written explanation from the parent may help avoid a court fight (but don't count on it).

Take a Deep Breath

There is very little that has do be done immediately, other than the funeral.  Get through that, and allow yourself to mourn.

Notify Those Who Need to Know:

If the decedent was receiving any kind of pension or government aid, those agencies need to be notified of the death.  While the funeral home may notify Social Security, you need to cut off any military pension, VA benefits, or corporate pension. If the decedent had life insurance, a claim must be made. If the decedent had minor children, Social Security should be notified so benefits can be paid to the children.  

Gather the Paper:

You are going to need a Death Certificate (the funeral home will order these, and you only need a few; most banks etc. today will take a scanned copy), and a list of assets and a copy of the will.

Hire an Attorney

Unless you have no money and the decedent had no money, hiring an attorney is the smart thing to do.  Yes, you can probably find all the forms you need online or at the library at the local courthouse, but this is one of those cases where it can be expensive to fix something that could easily have been done right in the first place had you hired the right person.  Give some thought to the expected size of the estate, the expected complexity of the estate and the expected problems (or hopefully lack thereof) with the heirs before hiring an attorney.  You don't need the guy in the corner office of a fancy firm in a high-rise building to handle passing a house and bank account from the surviving parent to siblings who get along.  However, if the will includes trusts, ongoing business interests, and multiple families, and substantial assets, that may be the person to hire.  Call the local bar association or use Google to find local attorneys who specialize in estates.  The outside of their office should give you some clue about where they rank fee-wise.  Most will give you a quote after the initial consultation (which should be complimentary) and will give you a general idea of what will happen and when it will happen.  

Open a Bank Account for the Estate

The attorney will likely advise you to open a bank account for the estate.  While Louisiana is different, in most states there is an initial round of paperwork followed by several months of probate--a waiting period during which creditors can make their claim.  After the initial round of paperwork, you will be given a document to take the the bank to claim the money for the estate.  That money cannot be distributed to the heirs at this point (unless it is a pay on death account) but can be used to pay the bills of the decedent or the expenses of the estate (like keeping the lights on in the house).  This account is also where you deposit money owed to the decedent or the estate (like rent collected from tenants).  

Manage the Affairs of the Decedent

You are now authorized to financially act as the decedent would.  You can collect debts and you have to pay bills.  You have a fiduciary duty to act in the best interest of the estate so as to maximize recovery for creditors and to provide as much as you can to the heirs.  If the house needs to be sold, you have to hire the real estate agent or otherwise arrange for it to be sold. If one of the heirs wants it and it was not specifically willed to that person, you need to figure out how to make the other heirs whole, whether is by that person paying the estate for other shares or by that person taking less of the pot--or whatever other way the heirs agree.  

Communicate with the Heirs Early and Often

Hopefully, you will be in a position shortly after the funeral to get a basic handle on the decedant's financial state.  You may not know it down to the penny, but you should be able to say "Dad had money in the bank, but the medical bills are really high and they just keep coming" or "Mom had a reverse mortgage on the house and almost no money in the bank" or "It looks like we are each going to get about $$.  Send everyone an email every month or two about the status of things; how much money did you spend, how long will it be etc.  

Talk to the Heirs About the "Stuff"

While scanners mean that we don't have to fight
over old family photos anymore
there may be something that everyone wants.
Most people who die have a house full of used furniture.  In the grand scheme of things, used furniture isn't worth much, and no creditor cares what you do with it.  However, heirs often do.  Get them together as soon as possible (maybe around the time of the funeral) and formulate a plan for dividing the things.  If it is possible and/or feasible to leave the house set up for a few months, and everyone agrees to leave everything alone for that time, it may be easier to deal with when emotions aren't as high. On the other hand, if the house is a rental, or if it needs to be sold to pay bills, or if the heirs are afraid that someone will take the wrong thing if it is left in the house, then dividing things up shortly after the funeral, before folks go back to "real life" may be easier.  Find out if the heirs are set on wresting every possible nickle from the estate, or if they want to take the easy money (bank accounts) and send the excess stuff to Goodwill. Try to keep everyone on good terms when it comes to dividing up what cannot be split.

Follow the Lawyer's Instructions 

Hopefully you picked a lawyer who has done this before and can tell you what to do to gather the assets.  On the other hand, you can ask the attorney to do it for you.  It all comes down to the amount of trouble involved, and how much you want to pay the lawyer vs how much you'd rather do yourself.  

Complete the Final Tax Return

You can do this yourself, or use money from the estate to hire someone to do it for you.  

Distribute the Assets

Hopefully this is no harder than writing a check.  The reality is, when heirs fight over an estate, the only winners are the lawyers.

Have you ever served as an executor/executrix?  Do you have any advice for those who may get this job in the future?

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Debt Free Divas*


  1. No, neither of us have had this job (or will in the future, God willing).
    My mother has been "breaking up her house for about five years now. Going through all of the stuff, having us choose. Loads of work for those of us who plow though everything for her.
    My sister is very careful to have all of the i's dotted and t's crossed. Mine is a family of notable discontent. She is determined that it will go well. I do not envy her. Mom is still alive and gives her (and us) good guidance. I pray we will all be drawing Social Security before mom passes. That Might make things better!

    1. BTW- printing this off and beginning to think we should be doing the same steps for our son---when he takes over--- just in case. Thanks for the heads up. There are several things here I had not thought about.

    2. This is one of those jobs that you hope you don't have to do often, and like most other things, after you do it the first time you think of things you should have done.

  2. Thanks for this handy checklist of responsibilities that are likely to fall onto the executor or administrator. I hope never to have to go through this but it's great to know what to expect!

  3. I will be an executor one day. It is a good idea too to ask where the will is being kept (if not with all the financial papers) and keep the name, address and phone number of lawyer that drew up the will so that it is handy in case you can't get find or get access to the paperwork right away.

    1. You are right Mary, I just assumed you'd know where the will was.

  4. I didn't realize the month (or so) of probate was to allow creditors to claim whatever they are owed. That makes a lot of sense.

    I'm the executor for my parents and I keep reminding my mom to put together a binder or something coherent - going through my grandmother's paperwork with her last year was a nightmare. She kept every scrap of paper and often jotted down really important account number of tiny slips of paper and crammed them in among a bunch of useless documents. It was something else.

    1. I guess it is different in different states, but in Mississippi probate was a minimum of six months after the notice was published in the paper, which happened after the papers were filed at the courthouse. In Louisiana, which does things differently than anywhere else, successions can and often are opened and closed on the same day.